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State's life sciences sector growing; here's what could make it stronger, experts say

The life sciences sector in Michigan is growing, but a more coordinated approach could make it even stronger going forward, panelists told a packed house Monday at the Business Leaders for Michigan second annual leadership summit in East Lansing.

“We have all the essential parts of it,” said Roger Newton, a co-developer of Lipitor and founder, executive chairman and chief scientific officer at Plymouth-based Esperion Therapeutics Inc. “But we have to put this patchwork quilt together of the talent, financing and the facilities so we can make this happen.”

At the summit at the Kellogg Hotel & Conference Center, Kevin McLeod, managing director of the Michigan Medical Device Accelerator, said the engineering talent is here, especially in Southeast Michigan, to build a stronger medical device industry in the state.

The automotive industry is only one way to build on that, he said.

“We’re not great because of cars, we’re great because we have people innovating and designing around a concept.”

Newton suggested universities do more to teach students to learn how to build companies and work within the regulatory structure in the life sciences industry.

He said the University of Michigan does this well, and the process could be replicated at other universities around the state.

Jan Garfinkle, managing director of Arboretum Ventures, a health care-focused venture fund, said funding is available for firms looking to get off the ground or expand.

She said the venture capital community is robust in the state, and of the 68 deals completed in 2013, about half were in the life sciences industry.

(For an in-depth look at the biggest deals in Michigan in 2013, see our special report online.)

An important point that needs to be emphasized on a national level, she said, is that it takes about a third less in dollars for a company to be successful in Michigan than it does on the coasts, a fact she attributes to lower salary and real estate costs.

“That is really, really important,” she said.

And that lower cost, she said, allows venture funds to return a greater percentage back to investors.

“It’s probably our key competitive advantage,” she said.

Newton also said Michigan is doing much better in attracting capital from the coasts.

“It’s no longer a flyover zone,” he said.

According to the Business Leaders for Michigan 2014 New Michigan report, released at the conference, the venture capital investment in life science firms increased in the state from $27.9 million in 2011 to $97.7 million in 2012.

That jump in investment moved Michigan from a national ranking of 24th in 2011 to 14th in 2012.

Patents awarded also increased from 235 in 2011 to 275 in 2012, but the state ranking remained at 19th nationally.